For individuals and family members with disabilities, the Canada Revenue Agency (CRA) offers a program called the Disability Tax Credit Certificate (DTC). The DTC is a non-refundable tax credit aimed to help persons with disabilities or individuals that support a disabled person reduce the amount of income tax they may need to pay. Once the person with a disability is eligible for the DTC, the disability amount can be claimed on their income tax.
Eligibility for DTC Documentation
To qualify for the DTC, a form needs to be completed and sent to CRA. On the form there is a section a medical practitioner is required to complete by describing and certifying the individual’s disability as well as any limitations. The medical practitioner may charge for completing this form; make sure to keep this receipt as this charge can, in most cases, be claimed as a medical expense on your tax return. Here is a link to the DTC form to complete
Criteria for DTC
The CRA is very specific of the criteria to be eligible for DTC. In order to be eligible a person must meet at least one of the following;
- Have restriction in performing at least one basic daily activity (speaking, hearing, walking, feeding, dressing, mental functions)
- Significant restrictions in two or more basic daily activities; this may include visual impairment
- Require life-sustaining therapy (respirator, cardiopulmonary resuscitation, dialysis, surgery)
Impairment must meet all the criteria;
- The impairment has or is expected to last continuously for a period of 12 months
- Impairment is continuous at least 90% of the time
To learn more about CRA criteria for Disability Tax Credit click here for the link
Conditions that qualify for DTC include;
- Digestive Disorder for example; Inflammatory Bowel Disorder, Colitis, Prostate Problems.
- Limited Mobility Issues – Back and Neck Problems.
- Breathing Disorders for example; Chronic Obstructive Pulmonary Disease (COPD), Emphysema, Tuberculosis, and Asthma.
- Visual Impairments
- Hearing Impairments
- Cognitive Impairments for example; Memory Loss, Dementia, Alzheimer’s
Approval of DTC
Once CRA approves your application for the DTC Certificate;
- You can request an adjustment from CRA to go as far back as 10 years to receive retroactive claims depending on what your doctor indicated as the start of the condition
- You are allowed to claim the disability amount on your tax return
- The disability amount can be transferred to a family member and/or spouse if the impaired individual is dependent upon them for their basic food, shelter, and clothing needs.
The procedure CRA follows is once an individual is deemed eligible, the application is then reviewed by a CRA Medical Board which takes 3 – 6 months to complete. This timeline varies depending on the complexity of each individual case. After the review process is completed by a CRA Medical Board, an amount of time will be assigned the certificate will be valid. This timeline is based on certain criteria related to the individual’s disability and is dealt on a case-to-case basis. On average, time allocated for a Disability Tax Credit Certificate is generally 3 – 4 years.
If your application is approved, CRA will send a letter to the applicant indicating the time period that the DTC applies. If it is indefinite, you will not need to reapply; however, if there is an expiry year, the applicant must reapply before the end of that year so that the DTC will not lapse.
At Banka & Company, CPA we have assisted many of our clients by providing the documentation that needs to be completed. If you or an individual you believe qualifies for the Disability Tax Credit Certificate, contact us to find out how we can be of assistance.